Commodity Trading Tips for Aluminium by Kedia Commodity

Ajay Kumar Kedia 25 July 2013

Aluminium yesterday settled flat -0.09% at 107.3 as mixed economic data kept investors cautious. China rolled out stricter controls for its aluminium sector to tackle overcapacity and push for consolidation and restructuring. These included a ban on the construction of new smelting plants at environmentally sensitive zones. HSBC's flash China manufacturing PMI for July was worse than forecasts, sending commodity and stock markets plunging. Later, a spokesman of the Ministry of Industry & Information Technology (MIIT) said the MIIT and National Development & Reform Commission (NDRC) are working on measures to invigorate enterprises. This indicates the Chinese government may introduce more economic stimulus in the second half of the year, easing market worries and helping base metals prices rally. The euro zone's flash manufacturing PMI for July climbed to 50.1, the highest since May, 2011 and marking the first time in two years that the index rose above 50. Germany's flash manufacturing PMI for July hit a 5-month high at 52.8. Flash manufacturing PMI in France, though still below 50 at 48.8 in July, did cap forecasts and hit a 17-month high, suggesting recovery in the country's economy. Eurozone business expectations index jumped to a new 3-month high at 56.9 in July, implying enterprises in the euro zone are optimistic over economic outlook. These positive indicators drove the euro higher, providing upward momentum to base metals prices. Technically market is under long liquidation as market has witnessed drop in open interest by -9.73% to settled at 2858 while prices down -0.1 rupee, now Aluminium is getting support at 106.65 and below same could see a test of 106 level, And resistance is now likely to be seen at 107.7, a move above could see prices testing 108.1.